ObamaCare: What you need to know (Part 6): Evaluating Medi-Share...

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Medi-Share, run by an organization called Christian Care Ministry, is a healthcare cost-sharing program. It's like health insurance, but with a twist: it isn't technically insurance. However, becoming a member of this or other similar programs will exempt you from ObamaCare's individual mandate, so apparently such programs are enough like insurance to satisfy the federal government.

Medi-Share in particular seems to be very similar to traditional insurance, much more so than Samaritan Ministries...

You pick a deductible, pay your premium, and receive a card in the mail. Then, when you need medical care, you present your card, and you are billed at the rate pre-negotiated by the PPO. If you have already met your deductible for the year, instead of sending the bill to you, Medi-Share pays it.

Of course, this is greatly simplified, and they insist on calling everything by different names to make it completely clear that this isn't really insurance. Still, the standout features of Medi-Share are its similarity to normal insurance and its low cost.

There are a number of benefits to being set up like normal insurance, and I don't doubt that Medi-Share is growing partly because of these benefits. For starters, most people already understand the way insurance works and are comfortable with it. Medi-Share doesn't require a huge paradigm shift to understand what it is and how to use it. Just learn their new terminology and you're good to go. Another benefit is that Medi-Share does some of the work that Samaritan Ministries leaves its members responsible for. Medi-Share handles all of the money-moving, for example, while Samaritan Ministries requires you to send your check to a different person each month.

If the thought of being a self-pay customer and possibly negotiating on prices scares you, you'll find Medi-Share appealing. Similarly, if you don't want to mess with sending and receiving checks to and from other individuals each month, the same holds true. 

However, there are downsides to the tactic of being like normal insurance. I asked Medi-Share how much of the premium was spent on non-medical costs, and they said that it was typically 20-30 percent. Presumably, at least part of the reason for this is because they do more work for you. Compared to Samaritan Ministries which only takes 8% of the monthly premium, Medi-Share's overhead is quite high. Frankly, I'm not impressed. It makes me wonder where all that money is going? Given that Obamacare mandates insurance companies spend no more than 15-20% on such non-medical costs, Medi-Share is set to be one of the least efficient organizations, unless it makes substantial changes.

Another downside to this approach of trying to be like normal insurance is that it can confuse people into thinking that this really is just like normal insurance. However, there are some noteworthy differences. In particular, certain eligibility requirements stand out:

  • You must have a Christian testimony and agree to their statement of faith.
  • You must pledge to live a healthy lifestyle, including not smoking, not doing illegal drugs and not engaging in sex outside of marriage.

Also, certain things that aren't covered stand out:

  • Abortion
  • Routine preventive care
  • Birth defects (According to this article)
  • Behavioral/mental health care
  • Cosmetic surgery
  • Pre-existing conditions
  • Only six months of any particular prescription is covered. 

One final difference is that maternity costs are covered in the base plan, which is very different from normal insurance. In my experience, maternity care has typically been a separate, and very expensive, addition to health insurance policies.

Depending on your point of view, some of this is obviously good, and some might be bad. Regardless, these particulars are mostly the same as the other healthcare cost-sharing organizations, but they probably won't be surprising to people who are joining programs that are less like insurance.

Another way these organizations are different from insurance providers is that they are not legally obligated by contract to pay your medical bills, even if your bills meet their published requirements. The way that Medi-Share is set up makes this fact less obvious, and in certain instances it has caused them and their members problems. Some state regulators are afraid that people will rely on it like insurance and then have it fail them, so they get nervous and try to shut it down.

I'm not actually concerned that Medi-Share or the other two largest organizations in this game can't be relied upon. Each of them has been around for many years and paid millions of dollars of their members' medical bills, just as promised. If they stopped doing so, their members would leave.

I'm more concerned about the states messing things up. If a state decides that Medi-Share is an insurance company and is thus required to follow all the regulations that normal insurance companies are required to follow, you should expect it to stop operating in that state. This is exactly what happened in 2012. A judge shut Medi-Share down in Kentucky, leaving hundreds of families without coverage. The Kentucky legislature quickly changed the law and Medi-Share is now operating in Kentucky once again. Still, let's make sure we understand the risks. If you're considering joining, it is worth asking about the legal standing of the organization in your particular state. 

It is in part because they ignore state and federal health insurance regulations that Medi-Share and the others are able to keep their costs so low. This doesn't just free them from certain administrative burdens. It also allows them to exclude people who engage in self-destructive behavior and thus not to have to pay the resulting medical expenses for those members who engage in such behavior. 

This means the price is right. Like normal insurance, Medi-Share pricing is based on your age and health. Although that means I cannot summarize the pricing, it is very easy to find out what your costs would be. Check it out here. For our family of four with a $5,000 deductible, the annual cost would be $3936. If we count as "healthy," the premium would be discounted by up to 20 percent. On the other hand, certain health conditions can result in an additional fee of $80 per month.

Speaking of the benefit of the low price, unlike traditional insurance, the larger your family, the better the price. After your first child, the cost doesn't continue to go up as God gives you more children. Pricing is simply for 1 person, a family of 2, or a family of 3 or more. Compared to what we would pay for insurance with a similar deductible through Anthem Blue Cross Blue Shield, that's quite reasonable. It is cheaper even than Samaritan Ministries, assuming we don't have any major medical expenses in a given year. Of course, that's a major assumption. Comparing insurance (or non-insurance) options is always a lot of tradeoffs. It's like comparing apples, oranges, and pears—the differences make it hard to do a straight comparison. You have to weigh the price along with many other pros and cons when making a decision. (For a handy comparison between Samaritan and Medi-Share, click here.)

Almost all of those pros and cons can be found in their guidelines. Read them carefully and make sure you understand them before you decide to sign up. The same is true of any other insurance or insurance alternative, and my advice is the same: read everything carefully, especially the fine print. If you don't understand something, don't ignore it or assume it is good. Ask questions.

Here are some of the not-so-obvious things I've found out as I've investigated the idea of signing my family up with Medi-Share:

  1. Part of the way they get their costs so low is by having their members use Medicaid and other similar programs whenever possible. They will even give you credit towards your monthly premium if you do so. Since one of the reasons people might be considering joining is to avoid being on state programs, I found this surprising. A few years ago, friends of ours found out that their baby was going to be born with major medical complications. They had been on Medi-Share for a couple of years without needing to use it, so they called Medi-Share to make sure everything was going to be ok. They were told that, since they qualified for Medicaid, they needed to sign up for it and use it. They had signed up specifically to get off Medicaid in the first place. Bummer.
  2. They used to have annual and lifetime limits of $1 Million and $5 Million, but recently they dropped those limits. That's encouraging.
  3. The former policy was that you had to be completely tobacco free for the previous 12 months before you could sign up. Now it is set at just one month. Regardless, you've got to be ready to give up your nicotine. As far as I can tell, even a celebratory cigar isn't allowed.

Speaking personally, I decided against joining Medi-Share after I asked about their policy on adoption. I was told that adopted children could be added to the coverage easily, but that it would require a current physical. Congenital problems wouldn't be covered, whether known or unknown at the time of adoption, nor would any medical problems that came up which could be traced to a cause prior to the time they were added to the plan. In an international adoption, which we happen to be in the middle of, pretty much every medical problem that comes up is likely related to events prior to the adoption. International adoption already has so many risks, I wasn't interested in taking on another one—especially one with such potentially major financial ramifications.

The saleswoman I was speaking to was very friendly and helpful. She was honest in telling me that Medi-Share is not for everyone. If you are generally healthy and you want a low-cost alternative to an Obamacare plan, Medi-Share might be a great option.

Joseph and his wife, Heidi, have five children, Tate, Eliza Jane, Moses, Fiona and Annabel. He graduated from Vanderbilt University and Clearnote Pastors College. He is currently planting Christ Church in Cincinnati with several other families.